Vietcombank Seeks Foreign Listing After Domestic IPO

By Nguyen Nhat Lam

HANOI (Reuters) - Vietcombank, Vietnam's first state-run bank to float on the stock market, said on Friday it plans to list its shares on the Ho Chi Minh Stock Exchange early next year and seek a Hong Kong or Singapore listing in 2009.

The IPO of Vietcombank, or the Bank for Foreign Trade of Vietnam, has been delayed and is eagerly awaited by investors and analysts, who expect the planned listings of four state-owned banks to boost capital markets in communist-ruled Vietnam.

"We might list on either the Hong Kong or Singapore market, (with) 10 or 12 percent of the total shares," Vietcombank Chairman Nguyen Hoa Binh told a news briefing ahead of the bank's domestic initial public offering on Dec. 26.

Hanoi-based Vietcombank, Vietnam's fourth-largest lender by assets and the country's biggest firm to conduct an initial public offering, would list on the country's main exchange toward the end of the first quarter or early in the second quarter of next year, Binh said.

State-run companies in Vietnam are often partially privatized by selling shares to employees and outsiders at an auction before their actual stock market listing, which may come months later.

"We have selected a number of potential foreign strategic partners but price remains an obstacle to a happy marriage," Binh said without giving any names.

Traders said GE Money (GE.N) and Nomura Holdings (8604.T) were among those shortlisted. Credit Suisse (CSGN.VX) is advising Vietcombank on the stake sales to foreign investors.

Vietcombank will choose up to two strategic investors out of 60 foreign institutions that have bid. The partners would help it expand into investment and retail banking, bank officials said.

The bank has set a starting price of 100,000 dong ($6.20) a share for bidding at the auction, when it plans to raise at least $604 million through the sale of 97.5 million shares, or 6.5 percent of its stock, the stock exchange said.

That would give the bank a market value of $9.3 billion.

Foreign investors could only buy up to 29.5 million shares at the auction, or about 1.96 percent of the bank's stock.

Local investors have said they would bid at 120,000-150,000 dong ($7.40-$9.30) a share.

Vietcombank expects its net profit this year to fall nearly 36 percent to 1.85 trillion dong ($115 million) and revenue to fall 5.3 percent to 5 trillion dong.

A lower U.S. dollar as the result of the subprime mortgage crisis in the United States has hurt the bank's income because it holds $1.5 billion in offshore accounts, Binh said.

He also said the bank aimed for a loan loss ratio of 2.6 percent and an annual return on equity of 15 percent until 2010.

The government has ordered Vietcombank and three other state-run lenders to partially privatize this year, a move investors see as a test of Vietnam's commitment to opening its markets before joining the World Trade Organization in January.

Agribank, the country's largest bank, also plans to partly privatize next year.

So far only two privately-owned banks, Sacombank STB.HM and Asia Commercial Bank ACB.HN, are listed in Vietnam.

($1=16,122 dong)

(Editing by Jan Dahinten)